Last week, the Fed decided to raise interest rates again, this time from 1 to 1.25%. As we have seen last week (in my article titled “The Keynesian Output Gap Illusion”), this was inevitable according to the Taylor rule, which the Fed still pretends to follow one way or another. Another rate hike later this year is also in the cards. Yet, something surprising happened. Something the Fed would not think possible. And what happened does not bode well for the world’s most important economy.

The Yield Curve Is Flattening

A Shift of Power Within the Fed

Which Interest Rate Does Actually Matter? And Who Determines That Rate?

Source: St Louis Fed

More to Come on the US Economy


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